Puerto Rico union sues against PREPA privatization

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The Puerto Rico Electric Power Authority union filed suit against a deal for the private management of the authority’s transmission and distribution deal.

The Union of Electric Industry and Irrigation Workers (UTIER for its Spanish initials) filed the suit Thursday against the Authority of the Puerto Rico Public-Private Partnership, a Puerto Rico government agency that spearheaded the deal.

Guayanilla PREPA power plant
PREPA power plant in Guayanilla, Puerto Rico

The deal is interwoven with a PREPA bond deal concerning $9 billion of bond debt. The bankruptcy court hasn’t yet taken up consideration of the deal. The Puerto Rico Oversight Board has approved the deal.

Puerto Rico Attorney John Mudd said of the UTIER suit, “It is well written and raises multiple issues of importance but I don’t see the appellate court upsetting the cart of the PREPA restructuring.”

UTIER filed the suit in Puerto Rico’s Court of Appeals.

One of the attorneys for UTIER’s union, Jessica Méndez Colberg with Bufete Emmanuelli, said the suit was filed in the Court of Appeals even though it is not the lowest court in Puerto Rico's court system. She said it is being filed there because that is where one files appeals of Puerto Rico Energy Bureau decisions.

The suit also requests the court to order a freeze on the contract’s transition process while the legal proceedings continue with the union saying it would save the public money.

The union challenged the decision on two key bases.

First, it complained that neither it nor the Puerto Rican public was given the right to intervene and participate in the bureau’s hearings on the topic. The deal contract and the Authority of the Puerto Rico Public-Private Partnership’s report totaled 600 pages but were kept private until the bureau’s decision was made on June 17. By June 23 PREPA, Puerto Rico’s governor, and the Puerto Rico Oversight Board had approved the decision.

Second, UTIER said the participation by Edison Avilés Deliz, president commissioner of the Energy Bureau, in its considerations of the LUMA contract was inappropriate. Avilés Deliz was part of the alliance committee that selected LUMA Energy, negotiated the contract, and then asked the Energy Bureau to approve it. Later, he served as an adjudicator for the bureau on the matter and voted to approve the contract.

The Authority of the Puerto Rico Public-Private Partnership’s attorney in this case didn’t immediately respond.

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